List of Short Supply Chain Business Models

Box Schemes
predominatly or entierly produce from the farm, sometimes supplemented with produce from other farms or wholesalers to extend range or sales period.

Advantages

 * 1) Secure and regular income and workflow across the year.
 * 2) Long-term customer relationships
 * 3) Packaging can be collected and reused.
 * 4) Higher tolerance of imperfect produce
 * 5) Low overheads
 * 6) Streamline harvesting and distribution to 1 or 2 days per/ wk.

Disadvantages

 * 1) Regular deliveries of small orders
 * 2) Multiple customer accounts to manage
 * 3) High level of customer service
 * 4) Wide range of produce required
 * 5) Labour intensive - packing, delivery, order processing and management

Community Supported Agriculture

 * 1) Partnership between producers and consumers where risks and rewards of food production are shared
 * 2) ‘Members’ pay fixed regular amount for a share of the harvest
 * 3) Community built around local food

Advantages

 * 1) A committed customer base
 * 2) Regular, often upfront, income which improve cash flow
 * 3) Volunteers time from members
 * 4) Less packaging and waste
 * 5) Low/no transport costs
 * 6) Increase public knowledge and understanding of good farming
 * 7) Potentially greater access to grants depending on model
 * 8) Relatively low overheads
 * 9) Hub both for other business

Disadvantages

 * 1) Requires sufficient numbers of committed members.
 * 2) Need to produce a range of products over a long a period as possible
 * 3) Significant time in volunteer management/ engaging with members
 * 4) Fewer opportunities for ‘upselling’ and ‘cross-selling’ mean customers might be buying less produce than they would if they had a wider range of choice

Advantages

 * 1) No deliveries
 * 2) You can sell the produce you specialise in, and buy in other produce.
 * 3) Honesty boxes require little staff time
 * 4) You can add other business and ranges of produce to your farm based on a known footfall
 * 5) Upsell and cross-sell by offering a wide range of produce

Disadvantages

 * 1) Require regular staffing (except honesty boxes)
 * 2) Shops require maintenance and have high overheads.
 * 3) Can be expensive to set up
 * 4) Administration can be complex
 * 5) Potential for waste harvesting for unknown demand, and maintaining the impression of abundant produce

Advantages

 * 1) Low overheads for staffing and premises
 * 2) Increased potential customer base through national distribution
 * 3) You can sell the produce you specialise in
 * 4) You get the retail price for your produce (unless you sell through a food hub)
 * 5) Creates opportunities for farms in remote areas

Disadvantages

 * 1) Harder to develop customer retention because of absence of face-to-face contact
 * 2) Requires good online marketing and web skills
 * 3) Harder to predict cash flow and sales volumes
 * 4) Develop and maintain a website fit for purpose
 * 5) Good/ totally reliable internet connection

Mobile Shops

 * 1) Operate out of any vehicle or trailer that is suitable for the produce – vans, trucks, converted horse boxes
 * 2) Particularly beneficial in places where a community has lost its local amenities.
 * 3) By operating in different locations each day, sales are more concentrated.

Advantages

 * 1) The set-up is quicker compared to market stalls.
 * 2) If operated on behalf of a group of producers, a mobile stall saves the time of each producer staffing their own market stall separately.
 * 3) Draws in new customers.
 * 4) Local produce is ‘showcased’ and promoted.

Disadvantages

 * 1) Requires initial investment
 * 2) Trucks break down and require maintenance.
 * 3) Harder to predict cash flow and sales volumes
 * 4) Requires lot of staffing time

Advantages

 * 1) Simple way to test the market for your produce or introduce new produce ideas.
 * 2) Only run a stall as and when you have produce to sell.
 * 3) Direct contact with customers builds relationships
 * 4) No investment in premises
 * 5) Sense of community between the stallholders.

Disadvantages

 * 1) Requires a lot of staff time, often at the weekends.
 * 2) Need to estimate sales so that enough produce can be harvested and prepared for each market day.
 * 3) No guarantee of selling all of the produce
 * 4) Need to be a good communicator.

Advantages

 * 1) Producers receive near to retail prices
 * 2) Harvesting, packaging and delivery costs are removed
 * 3) Brings people to the farm and creates opportunities for up-selling and cross-selling
 * 4) Low infrastructure requirements

Disadvantages

 * 1) May be harder to predict demand and ensure full crop is sold
 * 2) Location dependant

Wholesale

 * 1) Larger volumes of a smaller range of crops
 * 2) Need some economies of scale
 * 3) Timely delivery, accurate forecasting of crop maturity and volume, and consistency in quality.
 * 4) The LWA supports cooperative models

Advantages

 * 1) Access to an established customer base
 * 2) Streamlined storage, packaging and transportation needs
 * 3) Simplified sales process.
 * 4) Reduced staff time compared to direct sales
 * 5) Capable of absorbing peak production and excess volume
 * 6) Easier to create time away from the farm than year round sales models

Disadvantages

 * 1) Lower prices/ Gross margins
 * 2) Wholesale buyers usually only purchase a limited number of crops per farm
 * 3) More demanding in terms of postharvest handling and storage practices - greater investment e.g. cold storage?
 * 4) Payment may take longer than individual customers
 * 5) Little direct contact with your customers.

Food Hubs

 * 1) Half way between wholesale & direct sales
 * 2) Local producers organise into a network directly to customers
 * 3) Orders are placed through the hub, & producer delivers
 * 4) Typically source and / or distribute within a 30-mile radius
 * 5) Wide range of produce to attract customers.
 * 6) Requires part-time access to physical space for packaging, collection and/or delivery
 * 7) Some existing food hubs add to the core activity, by for example, organising local food related social and educational events

Advantages

 * 1) Producers receive near to retail prices
 * 2) Customers are offered a wide range of local produce and home delivery.
 * 3) Builds connections between local producers and between producers and buyers/eaters

Disadvantages

 * 1) Model is still establishing itself & critical mass producers not yet reached in some areas
 * 2) Requires coordinated deliveries
 * 3) Requires a space for packing and possibly collection points.
 * 4) Food hubs make a mark-up on producer prices which makes food more expensive to the buyers/eaters, or means producers get a wholesale price

Advantages

 * 1) Larger orders than households and & higher value produce.
 * 2) Small quantities relative to wholesale customers.
 * 3) Fewer deliveries and less packing than box schemes.
 * 4) Opportunity to work with chefs towards seasonal menus.
 * 5) Opportunities to produce more speciality products

Disadvantages

 * 1) Highly dependent on relationship with chefs
 * 2) Often high staff turnover
 * 3) They can be demanding customers
 * 4) Produce must be consistent and reliable in terms of quality & delivery

Public procurement

 * 1) Historically difficult market for small producers
 * 2) Dynamic Food Procurement Systems about to make it much easier
 * 3) Work with ‘technology and logistics’ partner, e.g. local wholesalers

Advantages

 * 1) Large and stable market
 * 2) Provide a steady ‘baseline’ income
 * 3) Opportunities to deal with gluts?
 * 4) Smaller range of products compare to many direct sales models

Disadvantages

 * 1) Wholesale prices
 * 2) Councils under budgetary pressure
 * 3) More complex compared to retail markets (councils have more due diligence procedures)